Magazine article Screen International

Netflix: Japanese Viewers Defying Conventional Wisdom

Magazine article Screen International

Netflix: Japanese Viewers Defying Conventional Wisdom

Article excerpt

Net income of $29m for the three months ending in September dropped around 51% against the same period of 2014, as revenues reached $1.58bn for a 29% fall.

Shares fell 7% in post-market trading and the number of new US subscribers climbed by 880,000 to 44.8million, although Netflix had expected a 1.15million gain.

CFO David Wells attributed that in part to "involuntary churn" as US retailers switch to chip-based debit and credit cards.

The $1 monthly rise in subscription costs pushing standard membership tarrif to $8.99 may also be a factor although co-founder and CEO Reed Hastings insisted the streaming giant's price point still represented "incredible value". He declined to talk about future price rises.

However international growth surpassed expectations as 2.74million new members boosted the overall number to 26million.

Speaking on a conference call with Peter Kafka from the technology and media site re/code and RBC analyst Mark Mahaney, Hastings claimed every international market was "doing really well, but some are bigger than others. For competitive reasons we don't give per-country colour."

Chief content officer Ted Sarandos picked up the thread from a comment by Hastings that Netflix was continuing to learn from its international expansion.

"In Japan [where Netflix launched on September 2] what has been really great too is the local acceptance of our originals, so we're seeing them perform as a percentage of watching about the same as they are in other territories, which defies conventional wisdom that Japan is primarily a local territory," said Sarandos.

On an anecdotal level Sarandos' comments appeared to rebuffan exclusive report in Variety last month based on data from Parrot Analytics that suggested demand for original content in Japan would be lower than in other markets. However his comments remain unverifiable as Netflix does not issue data on individual territories or break down viewship numbers. …

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